AT&T announced on Tuesday, February 1, that it will spin off WarnerMedia, home to HBO and CNN, in a US$43 billion deal to merge the property with Discovery, reported the Wall Street Journal.
The telecom giant also cut its dividend by nearly half, sending shares down over 6% in pre-market trading.
After the spinoff, AT&T stated it expects to pay an annual per-share dividend of about US$1.11, down from its most recent US$2.08 level. The new payout would cost the company just under US$8 billion a year, down from the roughly US$15 billion it paid out in 2021.
AT&T stated the change accounts for the media-asset distribution and supports the telecom company’s plans to boost investment in 5G wireless and fiber-optic service. Reducing the size of the dividend will also allow the business to more quickly whittle down debt. The company has said it will remain one of corporate America’s highest dividend-yield payers after the spinoff.
AT&T executives had said they would cut the dividend to reflect the company’s smaller size once the media business is carved out into a separate company. The stand-alone telecom company stands to get about US$43 billion in cash from the transaction, subject to certain adjustments.
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
Italian Antitrust Authority Fines Amazon €10 Million for Unfair Trade Practices
Apr 24, 2024 by
CPI
Tuta Mail Raises Alarm Over Google Search Ranking Plunge Amidst DMA Rollout
Apr 24, 2024 by
CPI
UK Regulator Investigates Tech Giants’ AI Partnerships Amid Competition Concerns
Apr 24, 2024 by
CPI
TikTok CEO Confident of Overcoming US Ban: ‘We’re Here to Stay’
Apr 24, 2024 by
CPI
EU Conducts First-Ever Raids on a Company Under Foreign Subsidies Regulation
Apr 23, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI